Incoterms 2010

A Special Presentation by
The Louisiana District Export CounciI and
the U. S. Export Assistance Center of New
OrIeans
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Incoterms 2010
Presented by:
Bill Cummins
Executive Director
Global Trade Services
J. P. Morgan Chase
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ho pubIishes and
copyrights Incoterms?
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1 2 3
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1. The World Trade Organization
2. The Interstate Commerce Commission
3. The International Chamber oI Commerce
Incoterms address the IegaI
transfer of titIe for goods.
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1 2
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S7
1. True
2. False
Incoterms can be used for the
transfer of both goods and
services?
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1 2
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70
1. True.
2. False.
ow excited are you to be Iearning
about Incoterms 2010?
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1 2 3 4
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1. Very Excited!
2. Somewhat excited.
3. Just glad to be out oI the
oIIice.
4. My boss made me do it.
ncoterms 2010
In today`s presentation, we will address --
%e International Camber of Commerce and
its role in international trade.
%e significance of te new sipping terms.
Wat te new Incoterm rules are, wy some
were canged and wat Incoterms are not.
Wat`s te likely future impact of te new
Incoterms on business practices.
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ncoterms 2010
ISCLAIMER:
I am Not an Incoterm Expert, A Practitioner Only
I am Not an Attorney (no legal advice given!)
I am Not a CPA
AAD I AM AO1 FRAAK REYAOLDS!
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ncoterms 2010
Wo is FRANK 1. REYNOLS?
See page 122 of Incoterms 2010 (te book)
Frank is a long-time international marketer, industry
consultant and (prolific) autor on int`l trade
Associated wit te USCIB and te U. S. rep to te ICC on
Incoterms (2000 and 2010); te only non-lawyer on te ICC
committee for sipping terms.
He is te USA ~guru on International Commercial %erms!
His seminars are largely sold-out, one day programs (and
expensive); but igly recommended!
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ncoterms 2010
Wo is FRANK 1. REYNOLS?
President, Int`l Projects, Inc.
%el: 419 865 6201
Email: F1R424aol.com
Based in %oledo, Oio
oes freelance consulting
For a listing of is seminars, go to
www.iccincoterms2010.org
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ncoterms 2010
Oter Resources on Incoterms
Buy Frank`s book, a great resource --
Incoterms For Americans
Also, coming out in early 2011 will be 1he Cuide to Incoterms
by te ICC (very basic, pictorial guide; excellent desk reference book
wit lots of pictures!), autored by 1an Ramberg
%e ICC Wall Cart for tose wo need a andy ceat seet (and see
copy at end of tis presentation)
%e latter two items are ICC publications and available from
www.iccbooksusa.com
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ncoterms 2010
Wat is te International Camber of Commerce (ICC)?
Founded in 1919 (in Paris)
Representatives from over 120 countries
Represents te views of te Private Sector on te practical elements of
conducting international trade and investment.
Very igly regarded and viewed as aving legitimacy and autority in
most countries; a knowledgeable and reliable resource on int`l trade.
Key services include Int`l Court of Arbitration, ICC Camber of
Commerce Network.
Works closely wit te W%O and te U.N., and G20
Has a large framework of working committees tat address key sectors
and makes available rules and guidelines in areas as Finance, I%,
%ransportation and more . . . .
See page 126 of your book
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ncoterms 2010
Wat are Incoterms ?
International Commercial %erms (Incoterms)
First formulated by te ICC in 1936
A set of standardized guidelines tat parties in different countries (and
different legal environments) use for structuring te logistical elements
of selling and buying goods.
%e empasis is on delineating (in a sales transaction of tangible goods)
te risks and costs between te seller and te buyer via determining a
specific place and time for delivery of te goods.
For decades, te ICC just revised Incoterms as needed (as in early 80`s
replacing C& F wit CFR ) but as been on a 10 year cycle since 1990,
ten 2000, and now te 2010 revision.
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ncoterms 2010
Wat are Incoterms ?
International Commercial %erms (Incoterms)
Wit te 2010 version, te word ~Incoterms becomes a registered
trademark of te International Camber of Commerce in Paris.
(And I understand tey intend to aggressively protect tis mark!)
And for te first time tese terms are now referred to as RULES
Will be in some 36 (or more) languages
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ncoterms 2010
Wat are Incoterms ?
Abbreviated in a tree letter format, and the abbreviations are always in
English.
%ypically quoted wit a specific geograpic location of delivery, as Ex
Works Seller`s Plant (500 Annunciation Street, New Orleans, LA USA)
or can be as simple as FOB Any USA Port (but usually best to be specific
as you can).
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ncoterms 2010
Wy revise Incoterms beginning 2011?
%HE %OP %EN REASONS %O REVISE INCO%ERMS!
10. esire by te ICC to ave a universal set of sipping terms tat could be
used for domestic and well as international sipments.
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ncoterms 2010
Wy revise Incoterms beginning 2011?
%HE %OP %EN REASONS %O REVISE INCO%ERMS!
10. esire by te ICC to ave a universal set of sipping terms tat could be used for
domestic and well as international sipments.
9. In te USA, te national council tat oversees te Uniform Commercial Code
recommended te deletion of te section addressing sipping terms (te so-called
FOB terms), Article 2.319 troug 2.324 (as a part of an overall review of te
UCC in 2004). Slowly, states are adopting tis cange (and some may adopt
Incoterms, most ave so far done noting). WHA% HAS LOUISIANA ONE?
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ncoterms 2010
Wy revise Incoterms beginning 2011?
%HE %OP %EN REASONS %O REVISE INCO%ERMS!
10. esire by te ICC to ave a universal set of sipping terms tat could be used for domestic
and well as international sipments.
9. In te USA, te national council tat oversees te Uniform Commercial Code
recommended te deletion of te section addressing sipping terms (te so-called FOB
terms), Article 2.319 troug 2.324 (as a part of an overall review of te UCC in 2004).
Slowly, states are adopting tis cange (and some may adopt Incoterms, most ave so far
done noting). WHA% HAS ALABAMA ONE?
8. Also in te USA, te adoption of Sarbanes-Oxley requiring greater verification (and
liability to senior managers/board of directors) tat financial reporting is accurate and in
regulatory compliance -- AN INCO%ERMS CAN IMPAC% REVENUE AN
PAYABLES RECOGNI%ION (WHY?)
ncoterms 2010
Wy revise Incoterms beginning 2011?
7. esire by te Europeans to modify -- and simplify -- sipping terms reflecting
greater trade volumes witin te EU.
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ncoterms 2010
Wy revise Incoterms beginning 2011?
7. esire by te Europeans to modify -- and simplify -- sipping terms reflecting
greater trade volumes witin te EU.
6. %e advent of te Cinese as a major player in world trade, teir admission to
te W%O and teir desire to ave input into te ICC overall and, in
particular, input into te saping of sipping terms (altoug te ICC is still
very ~euro centric and te Incoterms oversigt committee members are
largely lawyers).
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ncoterms 2010
Wy revise Incoterms beginning 2011?
7. esire by te Europeans to modify -- and simplify -- sipping terms reflecting
greater trade volumes witin te EU.
6. %e advent of te Cinese as a major player in world trade, teir admission to
te W%O and teir desire to ave input into te ICC overall and, in
particular, input into te saping of sipping terms (altoug te ICC is still
very ~euro centric and te Incoterms oversigt committee members are
largely lawyers).
5. Increased inter-modalism in international trade and te need for
a broader scope of sipping terms to address land/ocean/air movements.
ncoterms 2010
Wy revise Incoterms beginning 2011?
4. Advent of International Financial Reporting Standards (IFRS) by European public
companies (and many larger private ones) wit a corresponding pus for a universal
standard on revenue and expense recognition primarily tied to point/time of delivery.
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ncoterms 2010
Wy revise Incoterms beginning 2011?
4. Advent of International Financial Reporting Standards (IFRS) by European public
companies (and many larger private ones) wit a corresponding pus for a universal
standard on revenue and expense recognition primarily tied to point/time of delivery.
3. GAAP in te USA is under int`l pressure to be in parallel wit te Int`l Financial
Reporting Standards (IFRS) -- not in our life times!
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ncoterms 2010
Wy revise Incoterms beginning 2011?
4. Advent of International Financial Reporting Standards (IFRS) by European public
companies (and many larger private ones) wit a corresponding pus for a universal
standard on revenue and expense recognition primarily tied to point/time of delivery.
3. GAAP in te USA is under int`l pressure to be in parallel wit te Int`l Financial
Reporting Standards (IFRS) -- not in our life times!
2. Significant desire by many Fortune 500 companies in te USA to ave a standardized,
universal set of sipping terms for use witin te USA (as well as internationally) tat is
consistent wit current business practices and modes of transport.
ncoterms 2010
Wy revise Incoterms beginning 2011?
%HE NUMBER ONE REASON %O REVISE INCO%ERMS!
1. %o assist te Obama Administration -- and on van de Werken -- in its Export
Initiative to OUBLE exports in five years (State of te Union Address,
February 2010) !
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ncoterms 2010
Wy are Incoterms relevant (and for wom)?
etermining exactly wen and were
delivery occurs is important, wy?
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ncoterms 2010
Wy are Incoterms relevant (and for wom)?
elivery is wen responsibility (but not necessarily legal title) for te
goods transfers from te seller to buyer, and with that event there are
material implications for the seller and for buyers regarding the transfer
of risk and cost.
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ncoterms 2010
Wy are Incoterms relevant (and for wom)?
In a typical ocean sipment, suc questions are inerent in putting togeter a sale --
Wo soulders te responsibility (costs & risk) from te seller`s
wareouse to te port?
Wo andles . . . export clearance & U. S. gov`t compliance requirements (wo is te
exporter of record)?
%en, wo andles te transport from te dock to on board te vessel?
As te vessel crosses te ocean to te destination port?
Unloading at te destination?
Customs clearance at te destination (wo is te importer of record)?
Wo pays any import duties (and in wat currency)?
Inland transportation to te buyer?
ncoterms 2010
Wy are Incoterms relevant (and for wom)?
etermining exactly wen and were delivery occurs is important, wy?
Impact on legal contracts --
Level One: Sales Contract / Purcase Order
Sublevel of Impacted by Incoterms:
%ransport Contract(s)
Insurance Policies (Cargo, Liability)
Letter of Credit
Finance Contracts
Oter ?
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ncoterms 2010
Wy are Incoterms relevant (and for wom)?
Provides a clear, universal set of standards for multi-
lingual, multi-cultural, ~multi-legal usage -- very practical
and based on business practices (not legal principles and
abstract ideas)
Specifies wic party -- eiter te seller or te buyer -- as
te obligation (to arrange and cover any costs) for
(transport) carriage, (cargo) insurance, and (trade)
compliance.
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ncoterms 2010
Wy are Incoterms relevant (and for wom)?
AAD AOW . . . a set of rules tat are
designed for both domestic and international
transactions!
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ncoterms 2010
For Wom are Incoterms Now
Relevant?
NO LONGER relevant for just te
import/export logistics department!
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ncoterms 2010
For Wom are Incoterms Relevant -- NO% just te import/export logistics
department, rigt?
Salespersons and Sales Support Staff (omestic
& International)
Logistics Staff (omestic & International)
Legal ept/Outside Counsel
Finance Managers
Accountants/CPAs
Bankers
Freigt Forwarders
Customs House Brokers
Oter (as Purely omestic Freigt Companies)?
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ncoterms 2010
Wat Incoterm Rules Don't o :
As we addressed earlier . . . by temselves, Incoterms do
NO% address transfer of legal title of te goods.
Rater, title passage is usually addressed in te
sales/purcase contract or, if not, by default it is addressed
by sovereign (local) law.
FYI . . . in most transactions, passage of legal ownersip
from te seller to te buyer usually requires two events:
elivery + Payment %itle %ransfer
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ncoterms 2010
Wat Incoterm Rules on`t o (Continued) :
By temselves, Incoterms are not law and do NO%
automatically apply to every sales transaction of tangible
goods.
%e parties must specify tat teir transaction is subject to
Incoterms 2010.
If silent, te default in te USA is te UCC for domestic
transactions (Yipes!).
Or, for cross border transactions, te (USA) default may be
te UCC or, in some instances, te UN Convention on te
Sale of Goods (CISG) to wic te USA is a party (similar
to treaty status).
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ncoterms 2010
Wat Incoterm Rules on`t o (Continued) :
By themselves, Incoterms do not determine revenue
or expense recognition in Iinancial statements.
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ncoterms 2010
By themselves, Incoterms do not determine revenue
or expense recognition in Iinancial statements . . .
GAAP in the USA, the Int`l Financial Reporting
Standards (IFRS) and other national accounting
standards address this issue -- - however, when and
where delivery occurs is often an integral part of
determining revenue/expense recognition in the sale
oI tangible goods (other elements which may aIIect
revenue recognition include control over the goods,
who has ultimate risk Ior the goods, seller buy-back
provisions and such).
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ncoterms 2010
Wat Incoterm Rules on`t o :
By themselves, Incoterms do not speciIy how
goods are to be packed Ior shipment or how
the goods are to be loaded and stowed onto
transport equipment (as in a container, on a
truck, rail car, aircraIt, ocean vessel, etc.).
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ncoterms 2010
Wat Incoterm Rules on`t o :
Incoterms are not Payment %erms (altoug
payment timing is commonly tied to te event of
delivery).
Payment %erms + Incoterms %erms of Sale
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#evising ncoterms - the
process (don't look!)
ecision to undertake the revision by the
ICC Incoterms oversight committee in
November 2007 in Stockholm (too much
wine served at dinner?)
Met 11 more times (no alcohol allowed!)
130 countries submitted input with over
2000 individual comments/requests Ior
changes.
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#evising ncoterms (a camel
made by a committee?)
Private sector input, mainly lawyers;
government representatives were excluded.
The ICC committee developed a working
draIt, went through 4 revisions, Iormal
adoption by the Iull ICC was September
2010
(see pages 119 - 123 Ior mug shots and bios)
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#evising ncoterms, the 2010
revision . . .
Result: -- Reduced number Irom 13 to 11
-- omestic and Int`l Usage
-- ClariIied some ambiguities (e.g.
the ship`s rail?)
-- A simpler, more user-Iriendly
set oI (voluntary) rules.
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#evising ncoterms, the 2010
revision . . .
Result: Added some speciIic deIinitions Ior clarity --
1. Carrier
2. Shipper
3. Delivery
4. Pre-carriage
5. Main Carriage
6. On-carriage
See Page 10 oI your book . . . . 43
ncoterms and Sales
Contracts -- Key Elements !
-- Full (legal) name and address oI parties
-- Good, practical description oI the goods that can be
used to veriIy the customs classiIication
-- Shipping Instructions (and packing) & Insurance
-- Payment terms and currency
-- Incoterms
-- Passing oI title (e.g., aIter delivery and payment)
-- Timing Ior events (latest shipment, etc.)
-- Applicable law and dispute resolution (as the ICC)
-- Duly signed by authorized parties
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ncoterms 2010 What's New?
New Layout Divided into two distinct sections
Any Mode Terms: DDP, AP, A%, CIP, CPT, FCA, EXW
Waterway/Maritime Terms: FOB, FAS, CFR, CIF
As opposed to 2000 version that began with EXW and progressed
to DDP Least to most risk
Includes explanation oI terms used in the book
11 Terms (Down Irom 13)
DAF, DES, DDU, & DEQ have been removed and replaced by
AP & A% respectively
Graphics added to illustrate risk and obligation
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What happened to
DAF, DES and DDU?
These three terms have been replaced by
one term DAP (Delivered at Place)
DAF (Delivered at Frontier) Rarely used and limited to ground
transport
DES (Delivered Ex-Ship) Limited to water shipments only
DDU (Delivered Duty Unpaid) Not appropriate Ior domestic
shipments since duty was implied
DAP can be used with any mode oI
transport domestic or international
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What happened to DEQ?
DEQ (Delivered Ex-Quay) replaced by
DAT (Delivered at Terminal)
DEQ required the seller (shipper) to unload at the quay
DEQ was limited to water transport
DAT
Requires the seller to unload at the quay, terminal, or
warehouse
Can be used with any mode oI transport
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F Terms General Considerations
Main Carriage contracted by buyer
Less work Ior seller, but less control over
documents
For documentary payment terms
For US Exporters, EEI (Electronic Export InIormation) Iilings are
typically done by Iorwarder
Compliance Documentation required
For US Importers, F Terms Iacilitate ISF
(Importer Security Filing 102) reporting
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C Terms General Considerations
Most advantageous Ior seller
Main Carriage contracted by seller
Most control over documents
More work Ior exporter than F Terms
Under C Rules, buyers are responsible Ior the
goods during the main carriage even though the
seller has made the arrangements Ior main
carriage
US Importers must rely on their supplier`s
Iorwarder to submit 102 documentation and US
Importers at risk during main carriage 49
D Terms General Considerations
'Arrival Terms
Main Carriage contracted by seller
Seller responsible Ior goods until delivered
('arrived) to speciIied location on the
buyer`s side
Not particularly advantageous iI you`re looking
Ior early revenue recognition
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D Terms
General Considerations Continued
For US Exporter more work than the F
Terms and greater risk than the C Terms
Seller agrees to deliver or make arrive at named location on the
buyer`s side
Potential Ior demurrage charges
For US Importers, again, the 102 Iilings
are handled by the vendor`s Iorwarder
Not the best term to use Ior L/C
transactions, since the BL or AWB do not
show actual arrival
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Any Mode Terms
EXW
FCA
CIP and CPT
DAP, DAT and DDP
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EXW (Ex-Works)
Any mode term
Least work Ior exporters/sellers
Popular among new exporters
Seller makes goods available Ior pickup
(including agreed packaging)
Is the packaging suitable Ior international
shipments?
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EXW (Ex-Works) Continued
Buyer responsible Ior loading goods at
EXW place
How oIten does this actually happen?
II the seller is loading, who takes responsibility iI damage occurs?
What document evidences oI delivery? (No standard)
Buyer responsible Ior export and
compliance documentation
Seller must provide company inIo to buyer`s Iorwarder and how
does seller Ieel about that
All oI this makes EXW less desirable
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EXW and Letters of Credit
What happens iI the buyer decides to instruct their
Iorwarder not to pick up the goods?
How irrevocable is your L/C?
What about custom made goods?
Who`s managing the documentation and
presentation process?
Do you want your customer`s Iorwarder preparing
documents you need to draw on your L/C?
What is the L/C`s conIirmed?
Diversion issues where will the goods end up?
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FCA (Free Carrier)
Recommended as substitute Ior EXW
Can be used with any mode oI transport
Seller must deliver the goods to the carrier
provided by the buyer at a named point on
the seller`s side
II no point is named the seller can choose a point best suited Ior
them - the named point can be the seller`s Iacility
Seller is responsible Ior:
Packaging, Loading, Pre-carriage (iI any none iI at seller`s dock),
Export Clearance, and Compliance Documentation
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FCA (Free Carrier) Continued
Seller not responsible Ior unloading on
buyer`s side
Buyer responsible Ior everything else aIter
loading
Insurance not speciIied
Freight Collect Buyer pays
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CPT (Carriage Paid To)
Can be used with any mode oI transport
Well suited Ior multimodal transport
Seller must clear goods Ior export including
export compliance documentation
Seller delivers goods, packaged Ior
shipment, to carrier Ior transport to a named
destination place on the buyer`s side
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CPT (Carriage Paid To)
Continued
Seller pays all transportation costs to
speciIied delivery destination main
carriage
Risk passes to buyer when goods are delivered to carrier
Buyer typically responsible Ior unloading at
place oI destination
Insurance not speciIied
Freight Prepaid Seller pays Need to
incorporate Ireight charges into invoice to buyer
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CP
(Carriage & nsurance Paid to)
Same as CPT except Insurance
Can be used with any mode oI transport
Well suited Ior multimodal transport
Seller must clear goods Ior export including
export compliance documentation
Seller delivers goods, packaged Ior
shipment, to carrier Ior transport to a named
destination place on the buyer`s side
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CP (Carriage & nsurance Paid to)
Continued
Seller pays all transportation costs to speciIied
delivery destination main carriage
Risk passes to buyer when goods are delivered to carrier
Buyer typically responsible Ior unloading at place
oI destination
Insurance is seller`s obligation (minimum
coverage)
Freight Prepaid Seller pays Need to incorporate
Ireight and insurance charges into invoice to buyer
61
DAT (Delivered at Terminal)
Any mode (arrival) term replaces DEQ
Seller obtains export clearance and handles
export compliance documentation
Seller packages goods Ior transport and
pays Ior all transportation costs to a named
destination terminal
Seller pays for unloading at the named
destination (dock, warehouse, etc.) terminal
on buyer`s side
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DAP (Delivered at Place)
Any mode (arrival) term
Seller obtains export clearance and handles
export compliance documentation
Seller packages goods Ior transport and
pays Ior all transportation costs to a named
destination place on the buyer`s side
Buyer responsible for unloading goods at
the named place this is the main
diIIerence b/t DAP and DAT
63
DAP (Delivered at Place)
Continued
Buyer responsible Ior import clearance and
on carriage (iI any)
No insurance speciIied
Freight Prepaid Seller pays Need to
incorporate Ireight charges into invoice to buyer
Seller must provide appropriate
documentation Ior release oI goods on
buyer side
This is important iI on a L/C Ilow oI documents
64
DDP (Delivered Duty Paid)
Any Mode (arrival) term
Not suitable Ior domestic shipments
Seller arranges to pay Ior:
Transportation, Foreign duties, Export and Import Licenses, Export
Compliance Documentation
Seller clears goods through Customs in
Ioreign country Ior delivery to a named
place on the buyer`s side
May be Ioreign exchange risk
65
DDP (Delivered Duty Paid)
Continued
Risky Ior exporter dealing with Ioreign customs
Buyer typically responsible Ior unloading at the
point oI delivery
Insurance not speciIied
Freight Prepaid Seller pays Need to incorporate
Ireight and insurance charges into invoice to buyer
An importer under DDP is not necessarily the
importer oI record since they are not clearing
goods through Customs this may aIIect Duty
Drawback
66
Sea and nland Waterway
Transport Terms
FAS
FOB
CFR
CIF
67
FAS (Free Alongside Ship)
Sea and Waterway Term
Usually used Ior charter party transactions
(not liner containerized shipments)
Seller delivers the goods, commodity, or
product, packaged or prepared Ior export
alongside a vessel designated by the buyer
at a named place/port on the seller`s side
Seller responsible Ior export clearance and
export compliance requirements
68
FAS (Free Alongside Ship)
Continued
Buyer responsible Ior:
Loading the vessel, Main carriage, Clearance
through Customs, On-carriage
Insurance not speciIied
Freight Collect Buyer pays
69
FOB (Free on Board)
Sea and Waterway Term (not to be conIused with
UCC term FOB)
Incoterms 2010 will be used Ior both domestic and
international transactions
Seller delivers the goods packaged and prepared
Ior export, loaded on-board a vessel chosen by the
buyer, at a port on the seller`s side
Seller is responsible Ior:
Export compliance requirements, Export Clearance, and
Pre-Carriage
70
FOB (Free on Board)
Continued
'Over the ship`s rail is no longer used as a point to deIine
transIer oI risk Irom seller to buyer
Buyer and seller should agree on what constitutes loaded on board
DiIIerent products loaded diIIerently
Seller responsible Ior perIormance oI carrier loading the ship even
though carrier is chosen by the buyer
Buyer responsible Ior:
Main carriage, Import clearance, and On-Carriage
Freight Collect Buyer Pays
Insurance not speciIied
Common Incoterm Ior L/C transactions
71
CF# (Cost and Freight)
Sea and Waterway Term
Seller delivers goods, packaged Ior
shipment, to carrier Ior transportation to a
named destination port on the buyer`s side
Risk passes to buyer when goods delivered to carrier
Seller:
Chooses vessel, Pays costs Ior main carriage, and
handles export clearance and compliance requirements
72
CF# (Cost and Freight)
Continued
'Over the ship`s rail is no longer used as a point to deIine
transIer oI risk Irom seller to buyer
Buyer and seller should agree on what constitutes loaded on board
Buyer responsible Ior:
Vessel unloading, Import clearance, and On-Carriage
Freight Prepaid Seller pays Need to incorporate Ireight charges
into invoice to buyer
Insurance not speciIied
73
CF
(Cost nsurance and Freight)
Sea and Waterway Term
Seller delivers goods, packaged Ior
shipment, to carrier Ior transportation to a
named destination port on the buyer`s side
Risk passes to buyer when goods delivered to carrier
Seller:
Chooses vessel, Pays costs Ior main carriage, and
handles export clearance and compliance requirements
74
CF
(Cost nsurance and Freight)
Continued
'Over the ship`s rail is no longer used as a point to deIine
transIer oI risk Irom seller to buyer
Buyer and seller should agree on what constitutes loaded on board
Buyer responsible Ior:
Vessel unloading, Import clearance, and On-Carriage
Freight Prepaid Seller pays Need to incorporate Ireight charges
into invoice to buyer
Insurance is seller`s obligation (minimum coverage)
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ncoterms 2010 Chart
Any Mode %erms Control of
Costs
Main Carriage
Cost
Risk of
Costs
Departure, Freight Collect
EXW (Ex-Works)
Buyer Buyer Buyer
Main Carriage Freight Collect
FCA(Free Carrier)
Buyer Buyer Buyer
Main Carriage Freight Prepaid
CIP (Carriage & Insurance Paid %o)
Seller Seller Buyer
CP% (Carriage Paid %o)
Seller Seller Buyer
Arrival, Freight Prepaid
A% (elivered at %erminal)
Seller Seller Seller
AP (elivered at Place)
Seller Seller Seller
P (elivered uty Paid)
Seller Seller Seller
76
ncoterms 2010 Chart
Sea, Inland Waterway
%ransport %erms
Control of
Costs
Main Carriage
Cost
Risk of
Costs
Main Carriage Freight Collect
FAS (Free Alongside Sip) Buyer Buyer Buyer
FOB (Free on Board) Buyer Buyer Buyer
Main Carriage Freight Prepaid
CFR (Cost and Freigt) Seller Seller Buyer
CIF (Cost, Insurance, and Freigt) Seller Seller Buyer
77
Which of the following are
Any Mode Terms?
78
1 2 3 4 S
0 0
86
0
14
1. EXW
2. FCA
3. CIP
4. DDP
5. All oI the Above
Which of the following are only
Sea and nland Waterway Terms?
79
1 2 3 4
0
89
0
11
1. FAS
2. FOB
3. CIF
4. All oI the Above
Which ncoterm is recommended
as a substitute for EXW?
80
1 2 3 4
13
0
2S
63
1. FOB
2. FCA
3. FAS
4. SOL
ncoterms are considered as Law
and are also used as Payment
Terms.
81
1 2
78
22
1. Very True.
2. Very False.